Oregon's Legend Homes can't pay its bills

Legend Homes Corp., one of Oregon's oldest and biggest homebuilders, has survived three recessions with a reputation for paying subcontractors on schedule on the 10th day of each month.

But Tualatin-based Legend last month stopped paying about 60 subcontractors after its biggest lender, KeyBank, cut off funding. Legend's outstanding bills total less than $1 million, President Jim Chapman said.

Legend has retained a turnaround specialist and now finds itself having to downplay worries about a potential bankruptcy.

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But builders say Cleveland-based KeyBank has been reluctant to restructure loans to allow them more time. Earlier this year, KeyBank filed a default notice on a Bend subdivision built by Renaissance Homes of Lake Oswego.

With economists predicting even deeper price declines, Chapman said he's had a tough time finding another lender willing to take over KeyBank's loan. Renaissance, though, has since raised enough from investors to pay off the debt, President Randy Sebastian said.